Weather delays and tariff relief support coffee, but record crop forecast weighs
Brazil harvest delays and tight inventories Heavy rains in Brazil slowed the harvest and hurt crop quality, while ICE arabica stocks fell to a 2.5-year low. This tightens near-term supply and pushes coffee prices up.
Explains the main bullish supply shock that drove prices higher in late June.
Record global production forecast The USDA now expects a record 189.7 million bag global coffee crop in 2026-27, up 6% from last year, with Brazil's arabica output up 12%. This larger supply outlook pressures prices down.
This is the key bearish fundamental that caused the sharp sell-off in late July.
Brazilian coffee exempt from new US tariffs Brazil said coffee is among 2,000 exports spared from new US forced-labor tariffs. This avoids a supply disruption to the US, easing fears and helping prices rebound.
This new tariff news directly reversed some of the recent price decline.
Potential US sanctions on Nicaragua The US may impose trade measures on Nicaragua, a major coffee exporter, which could tighten already tight US supplies. This risk supports higher coffee prices.
A new geopolitical risk that could further constrain supply to the US.